The archived blog of the Project On Government Oversight (POGO).

Apr 19, 2011

You're Fired: Forest Lab's CEO May Be Banned from Federal Healthcare

By Paul Thacker

As reported at Pharmalot, the CEO of Forest Laboratories received an unfortunate letter last week, demanding that he explain within 30 days why he should not be excluded from participation in federal healthcare programs. Banning Mr. Howard Solomon would prevent Forest from billing the government—every pharma company’s largest customer—and effectively end his over thirty-year tenure as CEO.

The company’s board expressed shock.

“It would be completely unwarranted to exclude a senior executive against whom there has never been any allegation of wrongdoing whatsoever,” said board member William J. Candee III, in a Forest statement. “Mr. Solomon has always set a tone of the highest integrity from the top.”

Oh, really?

The move to exclude Mr. Solomon apparently stems from Department of Justice accusations of fraud in 2009 related to Lexapro, an antidepressant. In a civil complaint, federal prosecutors alleged that Forest hid from parents and doctors the results of a study indicating that Lexapro might increase the risk of suicide in kids. Meanwhile, the complaint alleges, the company was promoting another clinical trial—financed by Forest, naturally—showing Lexapro’s effectiveness.

Prosecutors also charged the company with providing kickbacks to doctors in the form of sports tickets, expensive meals, and paid vacations.

Under “Marketing Tactics,” the document said the company planned to create bylined “or ghostwritten” articles. “We will identify a Lexapro thoughtleader to place 2-3 bylined articles in trade journals, consumer publications and on the Internet.”

The estimated cost for the ghostwriting program was $100,000.

Another sales tactic was funding continuing medical education (CME) courses, the classes doctors take to remain current about patient treatment. Believe it or not, doctors actually allow companies to pay for their education. And get this: some doctors believe that companies won’t use this opportunity to influence prescribing. Makes you want to question your doctor’s intellect, no?

Forest’s estimated CME budget to push Lexapro in 2004? $11.9 million.

Maybe we should change the acronym’s meaning to Corporate Marketing Education (CME)?

Other marketing schemes included “lunch and learns” for $36 million. “Providing lunch for a physician creates an extended amount of selling time for representatives,” the document said.

I suspect Forest was not serving PB&J.

And of course, Forest’s marketing plan taps Zelig himself, Dr. Charles Nemeroff. Can we ever escape him? In this case, Dr. Nemeroff’s bounty was a mere $100,000 in the form of an “unrestricted educational grant” to Emory University.

“Public relations activities surrounding this initiative to raise the awareness of Forest’s support in the field of psychiatry will be explored,” the document said.

At POGO, we’re more than happy to help Forest in this public relations endeavor.

So here’s where things get a little tricky and a tad bit confusing. Despite the damaging evidence staring them in the face, Forest seems nonplussed by DOJ’s action against their CEO.

“Numerous other major pharmaceutical companies have plead guilty to much more egregious offenses, and none of them has faced the exclusion of a senior executive who has not himself been convicted of a crime or pleaded guilty to a crime,” stated Herschel S. Weinstein, Vice President and General Counsel.

True. But we thought the “everybody else was doing it too, Mom,” defense went out in middle school. Guess we were wrong.

The government has been signaling for the last couple years that pharmaceutical executives should expect to become targeted for prosecution or debarment. Mr. Solomon is just the latest turn of the screw.

Expect more activity in the future.

Full Disclosure: The Forest Laboratories marketing document was released as part of my duties as an investigator for Senator Grassley

Although Bill Charles point isn't lost on me, a Paul Thacker blog sounds pretty good. And while "ghost-writing" articles for "thought leaders" hasn't made it into be books as a hard core crime, it's on the way.

The POGO angle here is that taxpayers spend billions of dollars a year through programs like Medicare and Medicaid on pharmaceuticals. With around 15 percent of federal healthcare spent on pharmaceuticals, this translates to almost 2 percent of the federal budget, making companies like Forest Labs some of the biggest recipients of federal dollars. Documents like the one highlighted in this post indicate that they may be willfully misrepresenting their product to, as Paul said, one of their largest customers: the taxpayer! That sounds like the sort of fraud, waste and abuse that we at POGO have always fought to eliminate.

Having worked as an investigator, I have to applaud Paul Thacker. I also need to thank POGO, and Senator Charles Grassley-even if he is a Republican. The folks from Iowa are fortunate to have such a statesman, and the American taxpayers, too!